The long term goal of this project is to improve computer based simulation methods that can be applied to study the structures, kinetics and thermodynamics of nucleic acids and their interaction with ligands. In the next period of grant support, we anticipate making major improvements in the energy function used to describe nucleic acids, and in the methodology to determine conformational free energies, free energies for mutations, and absolute free energies of association for nucleic acids and nucleic acid-ligand complexes using molecular dynamics/free energy approaches. We plan to use available X-ray and NMR data to evaluate our models. Applications to a number of the most interesting physical chemical phenomena in DNA and RNA structure and thermodynamics will be carried out including the Z phobicity of AT base pairs, the thermodynamics of RNA loops, the sequence selectivity and binding of DNA minor groove binding ligands, and the neighbor exclusion rule for ligand binding to DNA. Recent advances are allowing a most exciting synergy between computer based theoretical methods to study intermolecular inter-actions and experiments. These computer simulations are yielding more accurate insights than ever before and are often correctly predicting the results of subsequent experiments. The work proposed here has such a synergistic relationship to experiments and is aimed at a continued improvement of the predictive power of these computer based theoretical methods. The long term objective of our studies is to make the computer based approaches truly reliable and predictive and to use them in anti-cancer and anti-AIDS drug design.